Victory for Vintners & Consumers:

Minnesotans Now Free to Advertise and Order Wine Over the Net

Washington, DC—Thanks to litigation filed by the Institute for Justice Minnesota Chapter, Minnesota consumers who enjoy surfing the web to find wines may now legally use their mouse to place an order.

In a consent judgment entered on April 3, 2006, by the U.S. District Court for the District of Minnesota, the State of Minnesota stepped into the Internet age and acknowledged that it could not constitutionally enforce a law that forbade wineries across the country from accepting online orders from Minnesotans. The State also conceded that it could not constitutionally prohibit wineries from truthfully advertising or soliciting the direct sale and shipment of wine, and that it could not constitutionally discriminate between in-state and out-of-state wineries (or between wineries and liquor stores) when they exercise their First Amendment rights to communicate with Minnesota consumers.

“The State of Minnesota recognized it cannot prohibit wineries from truthfully informing consumers about the wines they can legally buy,” said Lee McGrath, executive director of the Institute for Justice Minnesota Chapter (IJ-MN), which represented the plaintiffs in the lawsuit. “As important, the State recognized that the First Amendment protects the right to communicate over the Internet.”

“In effect, the State conceded that America cannot be an information economy if the government restricts the free flow of information between lawful businesses and consumers over the Internet,” said Nick Dranias, IJ-MN’s staff attorney. “Now wineries nationwide can promote their lawful products and exchange information about them freely—and Minnesota consumers can hear what they have to say.”

In June 2005, Minnesota Gov. Tim Pawlenty signed legislation allowing in-state and out-of-state wineries to ship directly to consumers across the country and freeing Minnesota wine lovers to order from their favorite wineries, wherever they may be. The new legislation was signed shortly after a May 2005 U.S. Supreme Court ruling striking down state barriers that had prohibited wineries from direct shipping across state lines. The Institute for Justice litigated the U.S. Supreme Court case on behalf of Virginia and California vintners and New York state consumers. Unfortunately, as Minnesota tore down one barrier to free trade, it let stand another: the advertising and Internet speech ban.

But now, less than six months after the Institute for Justice Minnesota Chapter filed suit challenging the State’s senseless advertising and Internet speech ban, small family-run wineries like Fieldstone Vineyards and White Winter Winery are free to grow their businesses through e-commerce and effective marketing to distant customers like plaintiff Kim Crockett.

As Jon Hamilton, vice president of plaintiff White Winter Winery, explained, “We are located in the Northwoods of Wisconsin. The State of Minnesota’s acknowledgment that it cannot constitutionally force us to rely solely on word-of-mouth or foot traffic is not only immensely gratifying, it ensures that we can let our customers in Minnesota know they have access to our product from the convenience of their own home—which is the key to our success.”

“There is no question that combining e-commerce and direct shipping will allow us to grow our business substantially,” said Charlie Quast, co-owner of plaintiff Fieldstone Vineyards, located in Morgan, Minn., southwest of the Twin Cities. “This consent judgment confirms that the First Amendment stops the State from cracking down on our Internet sales or the truthful marketing of our legal product.”

In addition, Crockett said, “Striking down the ban just makes sense because it is ridiculous that the State ever prohibited me from talking online about getting a legal product delivered in a perfectly legal way.”

McGrath concluded, “Thanks to the courage of our clients in bringing this lawsuit, Minnesota’s senseless direct shipping gag rules no longer trample the free speech rights of entrepreneurs or consumers.”

The Institute for Justice Minnesota Chapter is a nonpartisan, nonprofit public interest law firm that litigates under the Minnesota and U.S. constitutions to protect individuals whose rights are being violated by the government. Through strategic litigation, training, communication and outreach, IJ-MN secures greater protection for individual liberty and extends the benefits of freedom to those who have been deprived of it by the government. In its lawsuit on behalf of wineries and wine consumers, Crockett v. Minnesota Department of Public Safety, IJ-MN has reinforced and expanded the U.S. Supreme Court’s recognition that “the free flow of commercial information is indispensable” to a free society.